Georgia PIRG - Financial Reformhttp://georgiapirg.org/topics/financial-reform
enFederal Reserve Questions Administration, Congressional Rollbacks of Wall Street Reform That Threaten CFPBhttp://georgiapirg.org/blogs/eds-blog/usp/federal-reserve-questions-administration-congressional-rollbacks-wall-street
<div class="field field-name-field-shared-post-date field-type-datetime field-label-hidden"><div class="field-items"><div class="field-item even"><span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2017-08-17T00:00:00-04:00">Thursday, August 17, 2017</span></div></div></div><div class="field field-name-field-author-bio field-type-node-reference field-label-hidden"><div class="field-items"><div class="field-item even"><a href="/staff/xxp/ed-mierzwinski">Ed Mierzwinski</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden">
<p>Recently released minutes of the July meeting of the Federal Open Market Committee, comprised of Federal Reserve governors and regional Federal Reserve Bank presidents, show its concern that proposed Congressional, Treasury Department and White House rollbacks to Wall Street reform could allow "a reemergence of the types of risky practices that contributed to the crisis." The rollbacks target both structural protections against reckless practices and the successful Consumer Financial Protection Bureau. The <a href="http://consumerfinance.gov" target="_blank"><strong>CFPB</strong></a>, in just six years, has returned nearly $12 Billion to over 29 million consumers harmed by unfair practices of Wall Street banks, payday lenders, credit bureaus and debt collectors.</p>
<p>Meanwhile, in an interview with the Financial Times excerpted in <a href="http://www.businessinsider.com/fed-stanley-fischer-on-unwinding-post-crisis-regulation-2017-8" target="_blank"><strong>Business Insider</strong></a>, Fed vice-chair Stanley Fischer repeated his previous warnings that risks from the proposed rollbacks to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 were "mind-boggling" and "dangerous." He also said the following:</p>
<blockquote><p>"It took almost 80 years after 1930 to have another financial crisis that could have been of that magnitude. And now after 10 years everybody wants to go back to a status quo before the great financial crisis. And I find that really extremely dangerous and extremely short-sighted," he told the FT. "One can understand the political dynamics of this thing, but one cannot understand why grown intelligent people reach the conclusion that [you should] get rid of all the things you have put in place in the last 10 years."</p></blockquote>
<p>From the <a href="https://www.federalreserve.gov/monetarypolicy/fomcminutes20170726.htm" target="_blank"><strong>FOMC Minutes</strong></a>:</p>
<blockquote><p>"Participants agreed that the regulatory and supervisory tools developed since the financial crisis had played an important role in fostering financial stability. Changes in regulation had likely helped in making the banking system more resilient to major shocks, in promoting more prudent balance sheet management strategies on the part of nonbank financial institutions, and in reducing the degree to which variations in lending to the private sector intensify cycles in output and in asset prices. Participants agreed that it would not be desirable for the current regulatory framework to be changed in ways that allowed a reemergence of the types of risky practices that contributed to the crisis."</p></blockquote>
<p>The Fed is right to be concerned. In the spring, the Treasury Department held a series of meetings with the financial industry (plus a token one with U.S. PIRG and other advocates) that resulted in a sweeping blueprint for deregulation released in June. We called it a<a href="http://www.uspirg.org/blogs/eds-blog/usp/us-treasury-report-gift-wall-street-threat-cfpb-and-everyone-else" target="_blank"><strong> gift to Wall Street</strong></a>. The PIRG-backed Americans for Financial Reform <a href="http://ourfinancialsecurity.org/2017/06/afr-report-treasury-bidding-big-banks-dodd-frank-report/" target="_blank"><strong>released a report</strong></a> showing that over 3/4 of it exactly matched the recommendations of the association of only the biggest Wall Street banks known as the <a href="https://www.theclearinghouse.org/about-tch" target="_blank"><strong>Clearing House Association</strong></a>.</p>
<p>The U.S. House, also in June, passed the so-called Financial Choice Act, which we call the <a href="http://uspirg.org/news/usp/what-could-possibly-go-wrong" target="_self"><strong>Wrong Choice Act</strong></a>. While the bill as a stand-alone piece of legislation is dead on arrival in the Senate, at House Financial Services Committee chairman and Choice Act chief sponsor Jeb Hensarling's (TX) behest, the House Appropriations Committee has embedded its worst rollbacks as "riders" into the <a href="https://appropriations.house.gov/news/documentsingle.aspx?DocumentID=395001" target="_blank"><strong>Financial Services and General Government Appropriations bill</strong></a>, HR3280, which will be considered as part of a must-pass package of 8 rider-laden appropriations bills all smushed together into a toxic, virtually unamendable proposal to fund the government before the current budget expires on September 30. As FSGG subcommittee chair Tom Graves (GA) <a href="https://appropriations.house.gov/news/documentsingle.aspx?DocumentID=395001" target="_blank"><strong>stated</strong></a>:</p>
<blockquote><p>"I’m particularly excited about the financial reforms, which slash harmful regulations, streamline outdated agency processes, and rein in the rogue Consumer Financial Protection Bureau."</p></blockquote>
<p>So is Wall Street, Mr. Graves, so is Wall Street. They are jumping up and down. </p>
<p>But it is good to see that the staid, stoic Federal Reserve Board of Governors is echoing concerns we have been raising for some time. Hopefully, the Senate will reject the demands of the House and of Wall Street's generals, too many of whom are unfortunately embedded at both the White House and Treasury Department.</p>
<p>The idea of the CFPB needs no defense, only more defenders.</p>
</div>
<ul class="field field-name-field-term-topics field-type-taxonomy-term-reference field-label-hidden">
<li class="field-item">
<a href="/topics/financial-reform" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Financial Reform</a> </li>
</ul>
Thu, 17 Aug 2017 20:43:06 +0000edm57046 at http://georgiapirg.orghttp://georgiapirg.org/blogs/eds-blog/usp/federal-reserve-questions-administration-congressional-rollbacks-wall-street#commentsWell, Well, Wells Fargo! Poster Child for Defending CFPB, Dodd-Frank.http://georgiapirg.org/blogs/eds-blog/usp/well-well-wells-fargo-poster-child-defending-cfpb-dodd-frank
<div class="field field-name-field-shared-post-date field-type-datetime field-label-hidden"><div class="field-items"><div class="field-item even"><span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2017-08-09T00:00:00-04:00">Wednesday, August 9, 2017</span></div></div></div><div class="field field-name-field-author-bio field-type-node-reference field-label-hidden"><div class="field-items"><div class="field-item even"><a href="/staff/xxp/ed-mierzwinski">Ed Mierzwinski</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden">
<p>As the big Wall Street banks, payday lenders and other opponents of consumer protection intensify pressure on Congress to weaken financial reform and gut the CFPB like a fish, reports of further Wells Fargo malfeasance serve as a warning that the Consumer Financial Protection Bureau and the rest of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act are needed now more than ever.</p>
<p>For those of you not keeping score at home, here's a recap of some (I may have missed a few) stories of recent Wells Fargo wrongdoing:</p>
<ul><li><strong>Fake Account Scandal</strong>: In September 2016, the CFPB <a href="https://www.consumerfinance.gov/about-us/newsroom/consumer-financial-protection-bureau-fines-wells-fargo-100-million-widespread-illegal-practice-secretly-opening-unauthorized-accounts/" target="_blank"><strong>fined Wells Fargo a record $100 million</strong></a> after it was discovered that executives had facilitated a toxic culture and supervised a sales quota scheme that forced low-paid frontline workers to open an estimated 2 million fake accounts in the names of actual customers to meet unreasonable goals. The bank's chief prudential regulator, the Office of the Comptroller of the Currency ($35 million), and the City Attorney of Los Angeles ($50 million) joined the CFPB's regulatory action with penalties of their own; the combined penalty was $185 million. The scandal led to termination of and severe haircuts to the compensation and retirement packages of the bank's CEO and a senior retail banking official.</li>
<li><strong>Fake Account Scandal Redux, Fake Accounts Grow</strong>: In July, as part of settlement negotiations over a private class action lawsuit over the scandal, it is now estimated that the scandal had begun much earlier, over a decade ago, and actually included as many as <a href="https://www.usatoday.com/story/money/2017/07/10/wells-fargo-pay-142-m-fake-account-settlement/464377001/?wpisrc=nl_finance202&amp;wpmm=1" target="_blank"><strong>3.5 million</strong></a> (USA Today) accounts. The increase in number of fake accounts appears to have been confirmed in a <a href="https://www.nytimes.com/2017/08/04/business/dealbook/wells-fargo-fraud-accounts.html" target="_blank"><strong>Wells Fargo regulatory filing</strong></a> reported on August 4 by Stacy Cowley (New York Times). </li>
<li><strong>Auto Insurance Scandal I: </strong>A scandal involving 800,000 consumers forced to obtain "lender-placed" car insurance that was <strong><a href="https://www.nytimes.com/2017/07/27/business/wells-fargo-unwanted-auto-insurance.html" target="_blank">first reported</a></strong> in late July by columnist Gretchen Morgenson (New York Times) is growing as <strong><a href="https://www.bloomberg.com/news/articles/2017-08-02/wells-fargo-gets-new-york-subpoenas-over-auto-insurance-scandal" target="_blank">states including New York</a> </strong> (Bloomberg) and <a href="http://www.reuters.com/article/us-wells-fargo-autos-idUSKBN1AO1VT?il=0" target="_blank"><strong>California</strong></a> (Reuters) subpoena the company for more information. According to Morgenson, who obtained a confidential internal Wells Fargo report:</li>
</ul><blockquote><p>"The expense of the unneeded insurance, which covered collision damage, pushed roughly 274,000 Wells Fargo customers into delinquency and resulted in almost 25,000 wrongful vehicle repossessions, according to the 60-page report, which was obtained by The New York Times. Among the Wells Fargo customers hurt by the practice were military service members on active duty." </p></blockquote>
<ul><li><strong>Auto Insurance Scandal II (Completely Different!)</strong>: In August, <a href="https://www.cnbc.com/2017/08/07/wells-fargo-awash-in-scandal-faces-violations-over-car-insurance-refunds.html" target="_blank"><strong>Morgenson also reported</strong></a> that the Federal Reserve Bank of San Francisco was investigating Wells Fargo over sales practices for a different type of insurance. GAP or Guaranteed Asset Protection insurance protects dealers against the difference between the loan value and current market value of a car. It is not required but is aggressively sold. The bank has been accused of failing to make refunds to consumers who pay their loans off early, as is required in several states.</li>
<li><strong>Settlement With Government Over Loans To Veterans:</strong> Last week, Wells Fargo agreed to <a href="https://www.bloomberg.com/news/articles/2017-08-04/wells-fargo-settles-with-u-s-government-over-loans-to-veterans" target="_blank"><strong>pay $108 million</strong></a> (Bloomberg) in a settlement with the Justice Department over mortgages to veterans.</li>
<li><strong>Refusal to Settle Overdraft Lawsuit:</strong> <strong><a href="http://www.miamiherald.com/news/business/article165153787.html" target="_blank">Wells Fargo has also refused</a> </strong>(Miami Herald), unlike other big banks, to settle claims concerning the practice of re-ordering transactions to maximize the number that trigger overdraft fees.</li>
</ul><p>Of course, Wells Fargo has also repeatedly used its forced-arbitration clauses to deny many of its customers the right to join class actions, even when it set up fake accounts in their names. Under a new CFPB rule, small-print arbitration clauses could no longer be used to deny the right to join a class action lawsuit against a financial wrongdoer. </p>
<p>The House has already voted to repeal the <a href="https://www.consumerfinance.gov/arbitration-rule/" target="_blank"><strong>new CFPB arbitration rule</strong></a> before it even takes effect. The Senate has a clear choice: protect consumers from corporate wrongdoing or protect Wells Fargo and other corporate wrongdoers.</p>
<p>The attack on this Consumer Bureau rule, of course, is just one part of a broad, comprehensive attack on financial reform orchestrated by Wall Street banks, with support from their many highly-placed officials now serving in the Trump Administration, including Treasury Secretary Steven Mnuchin and National Economic Council chief Gary Cohn, both formerly of Goldman Sachs.</p>
<p>For the past several years, House Financial Services Committee chair Jeb Hensarling has led Congressional attacks on CFPB and the full 2010 Dodd-Frank Act, including through recent House passage of his so-called <a href="http://www.uspirg.org/blogs/eds-blog/usp/“wrong-choice”-act-house-floor-today-harms-cfpb’s-protection-servicemembers-and" target="_blank"><strong>Financial Choice Act</strong></a>. The bill makes the naked, bold, unsubstantiated assertion that the financial collapse that occurred ten years ago is over and so is the need for the CFPB and, indeed, any continued Wall Street oversight. While the bill itself has no chance in the Senate, the most dangerous parts of it have been separately embedded into the <a href="https://appropriations.house.gov/news/documentsingle.aspx?DocumentID=395001"><strong>House Financial Services and General Government Appropriations bill</strong></a>, which will be negotiated with the Senate as part of a budget process which must be completed in September.</p>
<p>In his testimony on the Financial Choice Act -- which we call the Wrong Choice Act -- <a href="https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=401784" target="_blank"><strong>at a Financial Services Committee hearing</strong></a> in April, Professor Michael Barr, a former Treasury Department official who drafted much of the Dodd-Frank Act, including its provisions to establish the CFPB, referred to those who choose to forget the lessons of the 2008 economic collapse as having "collective amnesia." An <strong><a href="https://financialservices.house.gov/uploadedfiles/hhrg-115-ba00-wstate-mbarr-20170426.pdf" target="_blank">excerpt from Professor Barr's remarks</a></strong> is instructive (emphasis added):</p>
<blockquote><p>"The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 was passed in response to the worst financial crisis since the Great Depression. In 2008, the United States plunged into a severe financial crisis that shuttered American businesses, and cost millions of families their jobs, their homes and their livelihoods. The crisis was rooted in years of unconstrained excesses and prolonged complacency in major financial capitals around the globe. [...] <strong>While those American families have not forgotten the pain of the financial crisis, a kind of collective amnesia appears to be descending on Washington.</strong> <strong>Many seem to have forgotten the causes of the financial crisis, and the brutal consequences for American families.</strong> Instead of offering hope and opportunity to American families, the legislation being considered by this Committee would needlessly expose taxpayers, workers, businesses and the American economy to fresh risks of financial abuse and financial collapse.</p>
<p>That’s not a risk we can or should take."</p></blockquote>
<p>We agree. Unfortunately, a plausible alternative reasoning may be even worse: perhaps they haven't forgotten, but they've simply chose to ignore the warnings.</p>
<p>The idea of the CFPB needs no defense, only more defenders.</p>
</div>
<ul class="field field-name-field-term-topics field-type-taxonomy-term-reference field-label-hidden">
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<a href="/topics/financial-reform" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Financial Reform</a> </li>
</ul>
Wed, 09 Aug 2017 17:34:38 +0000edm57001 at http://georgiapirg.orghttp://georgiapirg.org/blogs/eds-blog/usp/well-well-wells-fargo-poster-child-defending-cfpb-dodd-frank#commentsCFPB Finds So-Called Overdraft Protection Costs Some $450/Yearhttp://georgiapirg.org/blogs/eds-blog/usp/cfpb-finds-so-called-overdraft-protection-costs-some-450year
<div class="field field-name-field-shared-post-date field-type-datetime field-label-hidden"><div class="field-items"><div class="field-item even"><span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2017-08-04T00:00:00-04:00">Friday, August 4, 2017</span></div></div></div><div class="field field-name-field-author-bio field-type-node-reference field-label-hidden"><div class="field-items"><div class="field-item even"><a href="/staff/xxp/ed-mierzwinski">Ed Mierzwinski</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden">
<p>This week, the Consumer Financial Protection Bureau (CFPB) rolled out draft <a href="https://www.consumerfinance.gov/about-us/blog/know-you-owe-we-are-designing-new-overdraft-disclosure-forms/" target="_blank"><strong>"Know Before You Owe" disclosures</strong></a> for marketing so-called "Standard Overdraft Protection," a controversial product that requires consumers to "opt-in" for the "privilege" of overdrafting debit and ATM transactions. It wants to know what you think about the new sample disclosures (see them <a href="https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/201708_cfpb_overdraft-model-forms-prototypes.pdf" target="_blank"><strong>here</strong></a>; comment by email to <a href="mailto:Cfpb_overdraft_forms@cfpb.gov">Cfpb_overdraft_forms@cfpb.gov</a>).</p>
<p>At the same time, it released a major study that finds that at-risk consumers who opt-in pay $450/year more than other at-risk consumers. According to CFPB director Richard Cordray's <a href="https://www.consumerfinance.gov/about-us/newsroom/prepared-remarks-cfpb-director-richard-cordray-overdraft-press-call/" target="_blank"><strong>remarks</strong></a> to the media:</p>
<blockquote><p>"It shows that opting in to overdraft coverage can be a very expensive way to manage a checking account. And it shows that the vast majority of those who pay the most in overdraft fees are those who can least afford it. In contrast to those who rarely or never overdraw their accounts, consumers who do so frequently tend to hold lower account balances, have lower credit scores, and have less access to traditional credit."</p></blockquote>
<p>The Consumer Bureau's <strong><a href="http://files.consumerfinance.gov/f/documents/201708_cfpb_data-point_frequent-overdrafters.pdf" target="_blank">study</a> </strong>was based on an anonymous (the CFPB, contrary to its detractors' baseless claims, does not spy on consumers) dataset of over 40 million consumer accounts. It found that financially vulnerable frequent overdrafters who opted-in paid $450/year more than similar consumers who chose not to opt-in, despite massive marketing campaigns by many banks.</p>
<blockquote><p>"But the difference in costs can be huge: frequent overdrafters who have opted in are typically charged 18 fees a year, compared to only 5 for those not opted in. With a fee of $34 per event, this amounts to almost $450 more in overdraft fees each year. [...] Finally, we found that frequent overdrafters use their debit cards six times more often than those who do not overdraft. Our prior studies have shown that the widespread use of debit cards can lead to more fees for those who opt in for overdraft."</p></blockquote>
<p>Years ago (1990s and earlier), overdrafting was seen as a negative behavior, like illegal parking or speeding. Banks actually "bounced" (refused to pay) many checks and charged consumers a bounced-check fee as a deterrent to bad behavior. Several things happened in the late 90s that gave banks a greater opportunity to make overdrafting a profit center.</p>
<ul><li>First, ATM cards previously usable only at ATM machines morphed into "dual-use" ATM/debit cards also usable at retail (point of sale). Banks marketed use of the cards heavily because of the potential to gain increased "swipe-fee" revenue from merchants accepting debit as well as credit cards and also to reduce the number of both cash and check transactions, along with their associated handling fees.</li>
<li>Second, banks, aided by aggressive consultants, realized that most accountholders (except for very new accounts) who bounced checks would eventually pay (were good for the money). So banks began to market the "overdraft privilege:" "We've got you covered; we'll cover your overdrawn transaction (pay it, not bounce it); but, hey guess what, we've got to charge you a $34 "courtesy fee."</li>
<li>Third, the consultants convinced the banks to "flip the switch" on ATM/debit transactions. All of a sudden, consumers who were accustomed to having their ATM transactions declined for insufficient funds found that they were getting a $3 latte for $37! ($3 plus a $34 average courtesy fee)! As the CFPB report and numerous consumer studies have found, debit transactions themselves have a median cost of only about $24; but the average fee is $34. Director Cordray: "This makes debit card and ATM overdraft a very expensive way to cover a small cash shortfall."</li>
<li>Finally, to tighten the screws down further, more and more banks adopted transaction re-ordering, which supercharged overdraft fee income. If a consumer had enough money in her account to pay for a $3 latte, then a $10 lunch and a $12 movie, but overnight a large check cleared that would have caused just one overdraft, the bank re-ordered the transactions to force 4 overdrafts. </li>
</ul><p>For over ten years, consumer groups including PIRG, the National Consumer Law Center, Consumer Federation of America, Consumers Union/Consumer Reports and others (our <strong><a href="http://consumerfed.org/press_release/consumer-groups-urge-federal-reserve-board-to-stop-abusive-bank-overdraft-charges/" target="_blank">2003 comments</a></strong>) badgered the regulators and Congress to do something. We argued that overdraft protection was a type of loan that deserved stronger protections; we argued that other practices were unfair and deceptive. The pre-CFPB regulators, finally, in 2009, <a href="https://www.federalreserve.gov/newsevents/press/bcreg/20091112a.htm" target="_blank"><strong>issued a regulation</strong></a> effective July 2010 that prohibited charging for overdraft protection on debit or ATM transactions unless a consumer first opted-in. The rule allows overdraft fees on checks and Internet payments, regardless of whether a consumer has opted-in.</p>
<p>It was a good step but not a full solution. Despite a plethora of successful class action lawsuits over re-ordering, that practice, as well as one where banks impose multiple daily and recurring overdraft fees, still continues. And while most big banks have settled their re-ordering cases for millions of dollars, poster-child wrongdoer <a href="http://www.miamiherald.com/news/business/article165153787.html" target="_blank"><strong>Wells Fargo continues to fight</strong></a>. Nonetheless, this week's announcements and the prospect of further CFPB action on unfair overdraft practices are welcome.</p>
<p>The Consumer Bureau has taken several enforcement actions against financial institutions for overdraft-related violations. Here are a few:</p>
<ul><li>This week, <a href="https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-against-jpmorgan-chase-failures-related-checking-account-screening-information/" target="_blank"><strong>CFPB ordered JPM Chase to pay a $4.6 million fine</strong></a> for a variety of violations concerning its sharing of accountholder information with specialty credit bureaus Chex Systems and Early Warning. Their blacklist (no positive information at all) credit reports based on alleged overdraft activity result in consumers being denied the right to open new accounts at other banks. Chase also "kept consumers in the dark" by failing to grant consumers their rights in disputes over reporting to the bureaus and about their own account-opening denials. More from the CFPB about <a href="https://www.consumerfinance.gov/about-us/blog/denied-bank-account-heres-what-you-should-know/" target="_blank"><strong>your rights</strong></a> if denied the right to open a bank account.</li>
<li>In 2016, <a href="https://www.consumerfinance.gov/about-us/newsroom/consumer-financial-protection-bureau-orders-santander-bank-pay-10-million-fine-illegal-overdraft-practices/" target="_blank"><strong>CFPB ordered Santander Bank to pay a $10 million fine</strong></a> for deceptive marketing of overdraft protection services.</li>
<li>In 2015, the CFPB imposed a penalty of <a href="https://www.consumerfinance.gov/about-us/newsroom/cfpb-fines-regions-bank-7-5-million-for-unlawful-overdraft-practices/" target="_blank"><strong>$7.5 million on Regions Bank</strong></a> for illegally imposing overdraft fees on hundreds of thousands of customers. The bank also had to return $49 million to those customers.</li>
</ul><p>Here are <strong><a href="http://www.uspirg.org/blogs/blog/usp/you-might-not-know-about-overdraft-fees" target="_blank">tips from PIRG (and CFPB) about how to avoid overdraft fees</a> </strong>and how to opt-out of controversial overdraft protection. (If you think you were deceived into opting in, certainly <a href="https://www.consumerfinance.gov/complaint/" target="_self"><strong>file a complaint</strong></a> to CFPB.) Here is our latest <a href="http://uspirg.org/reports/usp/big-banks-big-overdraft-fees" target="_blank"><strong>PIRG report</strong></a> (December 2016) on overdraft revenues and overdraft complaints to the CFPB.</p>
<p>The idea of the CFPB needs no defense, only more defenders.</p>
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<ul class="field field-name-field-term-topics field-type-taxonomy-term-reference field-label-hidden">
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<a href="/topics/financial-reform" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Financial Reform</a> </li>
</ul>
Fri, 04 Aug 2017 15:59:22 +0000edm56961 at http://georgiapirg.orghttp://georgiapirg.org/blogs/eds-blog/usp/cfpb-finds-so-called-overdraft-protection-costs-some-450year#commentsIt Makes No Sense to Eliminate Successful CFPB, Weaken Wall Street Reformshttp://georgiapirg.org/blogs/eds-blog/usp/it-makes-no-sense-eliminate-successful-cfpb-weaken-wall-street-reforms
<div class="field field-name-field-shared-post-date field-type-datetime field-label-hidden"><div class="field-items"><div class="field-item even"><span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2017-07-20T00:00:00-04:00">Thursday, July 20, 2017</span></div></div></div><div class="field field-name-field-author-bio field-type-node-reference field-label-hidden"><div class="field-items"><div class="field-item even"><a href="/staff/xxp/ed-mierzwinski">Ed Mierzwinski</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden">
<p>Wall Street reform turns 7 years old and its precocious centerpiece Consumer Financial Protection Bureau turns 6 tomorrow Friday, July 21. Established after the 2007-2008 economic collapse to help prevent another crisis by making consumer markets safe, the new Consumer Bureau’s record of significant achievements continues to grow even as Wall Street, the House majority, some of the Senate majority, the new administration and even payday lenders and debt collectors escalate their attacks on it. The latest attacks include attempts to eviscerate it through the budget process (the House <strong><a href="https://appropriations.house.gov/news/documentsingle.aspx?DocumentID=395001">Financial Services and General Government Appropriations bill</a></strong> recently sent to the floor even incorporates most of the controversial, retrograde <strong><a href="http://www.uspirg.org/blogs/eds-blog/usp/“wrong-choice”-act-house-floor-today-harms-cfpb’s-protection-servicemembers-and">Wrong Choice Act</a></strong>).</p>
<p>It makes no sense to weaken or even eliminate a transparent, 21st century agency whose successes have given consumers renewed confidence that the financial marketplace is being cleared of tricks and traps.</p>
<p>It makes no sense to forget, or ignore, the lessons of that 2007-2008 collapse that caused millions to lose homes, millions more to lose jobs and millions more ordinary Americans to lose trillions in critical retirement savings.</p>
<p>It makes no sense to unchain Wall Street fewer than 10 years after its recklessness led to the still-simmering Great Recession.</p>
<p>It makes no sense for the Congress to ignore the general public’s strong bipartisan support for continued Wall Street oversight and a strong Consumer Bureau (<strong><a href="http://ourfinancialsecurity.org/2017/07/afrcrl-polling-memo-fifth-consecutive-year-broad-backing-cfpb-wall-street-reform/">latest Americans for Financial Reform (AFR) poll</a></strong> July 2017). </p>
<p>Of course, Wall Street has lubricated and influenced the political process with billions of dollars of campaign donations and lobbying expenditures since 2008, hoping to “delay, defang, defund” and ultimately repeal the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act that established the CFPB and other reforms to protect the economy. In the <strong><a href="http://ourfinancialsecurity.org/2017/03/afr-report-wall-street-lobby-campaign-cash-tops-2-billion-2016-elections/">2015-2016 election cycle</a></strong> alone, the financial industry spent over $2 billion (in smaller numbers, that’s $2.7 million per day or $3.7 million per member of Congress) in efforts to return us to an era where misguided deregulation amplified by a culture of greed and recklessness allowed Wall Street’s self-anointed “<strong><a href="http://www.nytimes.com/2008/09/28/opinion/28wolfe.html">masters of the universe</a></strong>” to run amok over laws, consumers, depositors, small investors and taxpayers.</p>
<p>In particular, it makes no sense to turn the Consumer Bureau into an “<strong><a href="http://www.uspirg.org/blogs/eds-blog/usp/">unrecognizable husk</a></strong>” incapable of continuing to police financial markets and keeping them safe for consumers, as the House-passed Wrong Choice Act and numerous other bills under consideration are designed to do.</p>
<p>Let’s look at some highlights of the CFPB’s tremendous body of work, in just six years so far:</p>
<ul><li>This month, it finalized a hard-fought rule to give consumers back their rights to band together to take corporate wrongdoers to court. The <strong><a href="https://www.consumerfinance.gov/arbitration-rule/">CFPB arbitration rule</a></strong> prohibits financial firms from including class action bans in arbitration clauses in small-print, take-it-or-leave-it financial contracts to open bank accounts or obtain credit cards. Wall Street – backed by the litigious (on its own behalf) U.S. Chamber of Commerce -- has already vowed to kill this important rule. Disappointingly, Senator Mike Crapo (ID), Banking Committee chair, <strong><a href="https://www.banking.senate.gov/public/index.cfm/republican-press-releases?ID=6BDC6262-6C31-42FB-9794-21941FA3683E">has joined</a></strong> the Congressional Review Act effort to repeal the important <strong><a href="http://www.fairarbitrationnow.org/cfpb-arbitration-rule/">noripoffclause</a></strong> rule. </li>
</ul><ul><li><strong><a href="https://www.consumerfinance.gov/">CFPB</a></strong> has returned nearly $12 Billion in restitution and other relief to over 29 million consumers harmed by unfair financial practices. It has fined wrongdoers – from banks and credit card companies to debt collectors and credit bureaus -- hundreds of millions more in over 180 enforcement actions.</li>
</ul><ul><li>Last September, CFPB imposed a record <strong><a href="https://www.consumerfinance.gov/about-us/newsroom/consumer-financial-protection-bureau-fines-wells-fargo-100-million-widespread-illegal-practice-secretly-opening-unauthorized-accounts/">penalty of $100 Million on Wells Fargo</a></strong> after a joint investigation with other regulators found that the bank’s frontline staff had been forced to open millions of fake accounts to meet unreasonable sales goals imposed by executives.</li>
</ul><ul><li>In October, the CFPB announced a <strong><a href="https://www.consumerfinance.gov/about-us/newsroom/cfpb-finalizes-strong-federal-protections-prepaid-account-consumers/">rule to give prepaid card holders</a></strong> consumer rights similar to those credit and debit card holders have had for decades. (Demonstrating its flexibility to address legitimate industry concerns, CFPB is now making small <strong><a href="https://www.consumerfinance.gov/about-us/newsroom/cfpb-seeks-comment-proposed-changes-prepaid-rule/">modifications</a></strong> to the rule.) In February, CFPB <strong><a href="https://www.consumerfinance.gov/about-us/blog/mastercard-and-unirush-pay-10-million-consumers-harmed-rushcard-technology-breakdown/">fined the prepaid RushCard parent company UniRush and Mastercard a total of $10 million</a></strong> for a 2015 debacle that left tens of thousands of cardholders without use of their own money or access to support for weeks.</li>
</ul><ul><li>In January, the CFPB sued the nation’s largest student loan servicer, <strong><a href="https://www.consumerfinance.gov/policy-compliance/enforcement/actions/navient-corporation-navient-solutions-inc-and-pioneer-credit-recovery-inc/">Navient</a>,</strong> and two of its subsidiaries for systematically “failing” student borrowers at every stage of the repayment process.</li>
</ul><ul><li>Here is a list of all <strong><a href="https://www.consumerfinance.gov/policy-compliance/enforcement/actions/">CFPB enforcement actions</a></strong>, including numerous others in 2017.</li>
</ul><ul><li>The CFPB has handled over 1.1 million consumer complaints (here’s where you or anyone can <strong><a href="https://www.consumerfinance.gov/complaint/">file</a> </strong>a complaint). Problems with debt collectors – including “you’re wrong, it’s not my debt” – lead the complaint parade. About 800,000 of those complaints have already been posted in its transparent <strong><a href="https://www.consumerfinance.gov/data-research/consumer-complaints/">public consumer complaint database</a></strong>. Consumers, researchers and competitors can review the database to gain insights into how markets work. <strong><a href="http://www.uspirg.org/page/usp/reports-cfpb-gets-results-consumers">PIRG has released ten reports</a></strong> in a continuing series on the complaint system and database, which the CFPB continually upgrades to make the complaint process more effective for both consumers and companies. In particular, the CFPB’s 2015 decision to add optional complaint narratives (stories) to the database has made the database a richer source of marketplace analytics. Our latest of the ten reports, released in June, <strong><a href="http://www.uspirg.org/reports/usp/protecting-those-who-serve">documented complaints by military servicemembers and veterans.</a></strong></li>
</ul><ul><li>The CFPB’s <strong><a href="https://www.consumerfinance.gov/servicemembers/">Office of Servicemember Affairs</a></strong> has worked alongside the Pentagon to protect servicemembers and veterans from financial fraud. In addition to harming those who serve, financial fraud hurts credit reports; credit problems are the leading cause of revocation of security clearances, which harms the nation’s unit preparedness.</li>
</ul><ul><li>In addition to the Office of Servicemember Affairs<strong>,</strong> the CFPB maintains offices for <a href="https://www.consumerfinance.gov/students/"><strong>Students and young consumers</strong></a>, for <a href="https://www.consumerfinance.gov/educational-resources/resources-for-older-adults/"><strong>Older Americans</strong></a> and for low-income and economically vulnerable consumers, an <a href="https://www.consumerfinance.gov/empowerment/"><strong>Office of Financial Empowerment</strong></a>.</li>
</ul><ul><li>The CFPB’s educational resources include “Know Before You Owe” self-help guides for people preparing to <a href="https://www.consumerfinance.gov/know-before-you-owe/"><strong>buy homes</strong></a> or take out <a href="https://www.consumerfinance.gov/students/knowbeforeyouowe/"><strong>student loans</strong></a> as well as excellent workbooks for service organizations helping consumers with debts or to set <a href="https://www.consumerfinance.gov/educational-resources/your-money-your-goals/"><strong>budget and savings goals</strong></a> (any consumer will benefit from checking out the training resources available).</li>
</ul><ul><li>The CFPB has completed numerous other rules to protect consumers, including a major <strong><a href="https://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/?filter1_topics=title-xiv">Dodd-Frank Act Title XIV</a></strong> package against the mortgage origination, servicing and foreclosure schemes that worsened the Great Recession. In progress is another major rule to <strong><a href="https://www.consumerfinance.gov/policy-compliance/rulemaking/rules-under-development/notice-proposed-rulemaking-payday-vehicle-title-and-certain-high-cost-installment-loans/">regulate predatory small dollar payday and car title lending</a></strong>.</li>
</ul><p>It makes no sense to weaken or eliminate the CFPB, unless you are Wall Street or some of its even more tawdry wingmen – from predatory payday lenders to debt buyers – all looking to trample laws, consumers, depositors, small investors and taxpayers.</p>
<p>For the rest of us (and that’s nearly all of us), it makes no sense to weaken or eliminate the CFPB. It’s the first government agency with just one job – protecting consumers by making the financial marketplace fair – and it’s been wildly successful in just six short years. Don’t let Wall Street and its wingmen convince Congress and the administration to take this tough, but fair, consumer cop off the beat. The idea of the CFPB needs no defense, only more defenders. You can become one by liking or sharing and using the hashtag #DefendCFPB.</p>
<p> </p>
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<a href="/topics/financial-reform" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Financial Reform</a> </li>
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Thu, 20 Jul 2017 16:59:01 +0000edm56856 at http://georgiapirg.orghttp://georgiapirg.org/blogs/eds-blog/usp/it-makes-no-sense-eliminate-successful-cfpb-weaken-wall-street-reforms#commentsTelco, Cable Guys Assault State Broadband Privacy Efforts, Sacramento Key Battlegroundhttp://georgiapirg.org/blogs/eds-blog/usp/telco-cable-guys-assault-state-broadband-privacy-efforts-sacramento-key
<div class="field field-name-field-shared-post-date field-type-datetime field-label-hidden"><div class="field-items"><div class="field-item even"><span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2017-07-17T00:00:00-04:00">Monday, July 17, 2017</span></div></div></div><div class="field field-name-field-author-bio field-type-node-reference field-label-hidden"><div class="field-items"><div class="field-item even"><a href="/staff/xxp/ed-mierzwinski">Ed Mierzwinski</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden">
<p>After the new FCC chair <a href="https://arstechnica.com/tech-policy/2017/03/isps-and-fcc-chair-ajit-pai-celebrate-death-of-online-privacy-rules/" target="_blank"><strong>Ajit Pai</strong></a> and Congress, through a <strong><a href="https://arstechnica.com/tech-policy/2017/04/trumps-signature-makes-it-official-isp-privacy-rules-are-dead/" target="_blank">Congressional Review Act legislative veto signed by the president</a></strong>, rolled back Obama-era broadband privacy rules applying to collection and use of your personal information by Internet Service Providers (generally large telephone and cable companies) the <a href="http://www.telecomtv.com/articles/privacy/us-states-and-cities-look-to-re-introduce-data-privacy-rules-15609/" target="_blank"><strong>states </strong></a>(and some cities such as<strong><a href="https://www.engadget.com/2017/05/06/seattle-broadband-privacy-rules/" target="_blank"> Seattle</a>) </strong>moved to replace protections. AT&amp;T, Verizon and Comcast swiftly sent lobbyists out around the nation to quash or delay the efforts. </p>
<p>This week,<a href="https://www.theverge.com/2017/7/15/15966108/california-bill-browser-history-internet-privacy" target="_blank"><strong> Sacramento remains under siege by a phalanx of ISP lobbyists</strong></a> as a key California proposal, <strong><a href="https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB375" target="_blank">AB375 (Chau)</a>,</strong> is considered. The Senate Rules Committee -- <a href="https://www.eff.org/deeplinks/2017/06/californians-demand-vote-your-broadband-privacy-telecom-lobby-runs-out-clock" target="_blank"><strong>after stalling it for weeks</strong></a> -- finally referred it to a gauntlet of 3 committees in an effort to kill it. Positively, following ongoing efforts from the mayor of San Francisco and others including consumer, privacy and other civil society groups (<a href="https://static1.squarespace.com/static/5931ee62bf629a03dd2760de/t/59473b5003596eab772d0a71/1497840470576/CalBIPA+Support+Coalition+Letter.pdf" target="_blank"><strong>letter from 17 groups</strong></a> including CALPIRG) and others, one committee chair, of Senate Business and Professions, has waived his committee's review rights but the bill still faces votes tomorrow in both the Utilities and Judiciary Committees. As the groups said in their joint letter:</p>
<blockquote><p>"Providers of broadband internet service have a unique and powerful role in today’s online ecosystem. Their position as internet gatekeepers gives them a comprehensive view of individual consumer behavior, one that consumers cannot readily avoid or shield themselves from when they use necessary internet services. The power of the internet service provider is further enhanced by the lack of competition that presently exists for high-speed access. According the latest FCC data, 41 percent of Americans have only one company offering high-speed broadband access in their community.</p>
<p>As the role of the internet in the daily lives of consumers increases, this means an increased potential for data collection of personal information and sensitive facts about one’s daily life. The shadow of surveillance can create a chilling effect on speech, association, and online commerce, and even increase the potential for data-driven discrimination, governmental overreach, and the theft of highly personal information. By contrast, strong protections that enhance Californians’ confidence would encourage greater adoption and use of the internet, as individual comfort and trust leads individuals to conduct even more of their everyday business online." </p></blockquote>
<p>Why should ISPs be subject to tougher privacy rules than Amazon, Facebook and other so-called "edge" companies? The answer is: "Why shouldn't they?" You don't have to shop at Amazon and you don't have to join Facebook, but to access the Internet, you need an ISP. While a few non-profit and smaller ISPs still exist, most people log on through one of the big ISPs. Every click and every keystroke goes through their servers (even if you are using any private browsing tactic).</p>
<p><strong>Battle continues in DC:</strong> The FCC and FTC both generally support weaker privacy regulations for all firms. A <a href="https://www.wirelessweek.com/news/2017/05/house-broadband-privacy-bill-would-lump-edge-providers-isps" target="_blank"><strong>proposed broadband privacy bill</strong></a> from Rep. Marsha Blackburn (TN), HR2520, purports to protect some personal information under an opt-in consent regime rather than a weaker opt-out, but the bill is loophole-ridden and aggressively preemptive of state and local authority (<a href="http://consumerfed.org/wp-content/uploads/2017/06/consumer_privacy-letter_6-30-17.pdf" target="_blank"><strong>letter</strong></a> from privacy and consumer groups, including PIRG, <a href="https://www.congress.gov/bill/115th-congress/house-bill/2520" target="_blank"><strong>comparing</strong></a> industry-friendly HR 2520 to better Senate proposal (Markey-MA (note correct Markey bill# is <a href="https://www.congress.gov/bill/115th-congress/senate-bill/878" target="_blank"><strong>S878</strong></a>)) and other bills.</p>
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<a href="/topics/financial-reform" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Financial Reform</a> </li>
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Mon, 17 Jul 2017 17:49:18 +0000edm56801 at http://georgiapirg.orghttp://georgiapirg.org/blogs/eds-blog/usp/telco-cable-guys-assault-state-broadband-privacy-efforts-sacramento-key#commentsStatement On CFPB's Rule Restoring Rights To Take Wrongdoers To Courthttp://georgiapirg.org/news/usp/statement-cfpbs-rule-restoring-rights-take-wrongdoers-court
<div class="field field-name-field-newsrelease-status field-type-text field-label-hidden">
For Immediate Release
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<div class="field field-name-field-shared-post-date field-type-datetime field-label-hidden">
<span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2017-07-10T00:00:00-04:00">Monday, July 10, 2017</span>
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<div class="field field-name-field-author-bio field-type-node-reference field-label-hidden"><div class="field-items"><div class="field-item even"><a href="/staff/xxp/ed-mierzwinski">Ed Mierzwinski</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden">
<p dir="ltr"><em>This Statement Can Be Attributed to U.S. PIRG Consumer Program Director Ed Mierzwinski</em></p>
<p dir="ltr">“U.S. PIRG commends the Consumer Financial Protection Bureau for<a href="https://www.consumerfinance.gov/about-us/newsroom/cfpb-issues-rule-ban-companies-using-arbitration-clauses-deny-groups-people-their-day-court/" target="_blank" data-saferedirecturl="https://www.google.com/url?hl=en&amp;q=https://www.consumerfinance.gov/about-us/newsroom/cfpb-issues-rule-ban-companies-using-arbitration-clauses-deny-groups-people-their-day-court/&amp;source=gmail&amp;ust=1499803486514000&amp;usg=AFQjCNGdidBibosqwRKgPbrTjWuV2kMIjA"> finalizing an important rule</a> to prevent financial firms from using mandatory arbitration clauses to deny consumers the right to have their day in court. These small-print clauses in boilerplate, take-it-or-leave-it contracts have for too long prevented consumers who individually could not afford a lawyer from banding together in class actions when, collectively, the wrongdoing costs them millions of dollars or more.</p>
<p dir="ltr">This CFPB rule will prevent Wells Fargo and other wrongdoers from blocking groups of consumers from taking them to court. Incredibly, Wells Fargo has argued that mandatory arbitration clauses on its actual accounts prevent its customers from bringing class actions against its millions of fake accounts.</p>
<p dir="ltr">By restoring class action rights to financial customers, the CFPB rule will also force better behavior in the financial marketplace, since companies will want to clean up their practices to avoid being held accountable for breaking the law. Three items of note: first, Congress gave CFPB the authority to do this; second, in 2007 Congress banned arbitration in certain loans to servicemembers and veterans; and, third, in 2010 Congress banned arbitration in most mortgages.</p>
<p dir="ltr">The idea of the CFPB needs no defense, only more defenders.”</p>
<p dir="ltr">-30-</p>
<p dir="ltr">U.S. PIRG is the federation of state Public Interest Research Groups. PIRGs are non-profit, non-partisan public interest advocacy organizations that stand up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society. On the web at<a href="http://www.uspirg.org/" target="_blank" data-saferedirecturl="https://www.google.com/url?hl=en&amp;q=http://www.uspirg.org/&amp;source=gmail&amp;ust=1499803486514000&amp;usg=AFQjCNFgY_LwRuzuV-D8gPq-feOas9VDoA"> www.uspirg.org</a>.</p>
</div>
<div class="field field-name-field-term-topics field-type-taxonomy-term-reference field-label-hidden">
<a href="/topics/financial-reform" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Financial Reform</a>
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<div class="field field-name-field-shared-subtitle field-type-text field-label-hidden">
Prohibits Bans on Class Actions in Mandatory Arbitration Clauses
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<div class="field field-name-field-shared-organization field-type-text field-label-hidden">
U.S. PIRG
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<div class="field field-name-field-shared-summary field-type-text-long field-label-hidden">
<p>Financial wrongdoers have long used mandatory arbitration clauses buried in small-print, take-it-or-leave-it contracts to prevent consumers from banding together to have their day in court. Our statement on the CFPB's important new rule restoring consumer rights to join class actions follows.</p>
</div>
Mon, 10 Jul 2017 20:13:45 +0000edm56681 at http://georgiapirg.orghttp://georgiapirg.org/news/usp/statement-cfpbs-rule-restoring-rights-take-wrongdoers-court#commentsSloppy Credit Bureaus, Sketchy Credit Doctors Slammed by Trifecta of CFPB, State AGs and Consumer Lawyershttp://georgiapirg.org/blogs/eds-blog/usp/sloppy-credit-bureaus-sketchy-credit-doctors-slammed-trifecta-cfpb-state-ags-and
<div class="field field-name-field-shared-post-date field-type-datetime field-label-hidden"><div class="field-items"><div class="field-item even"><span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2017-06-28T00:00:00-04:00">Wednesday, June 28, 2017</span></div></div></div><div class="field field-name-field-author-bio field-type-node-reference field-label-hidden"><div class="field-items"><div class="field-item even"><a href="/staff/xxp/ed-mierzwinski">Ed Mierzwinski</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden">
<p>In the news this month are several successful efforts to improve credit report accuracy, compensate the victims of credit bureau malfeasance and also to bring some credit repair doctors to heel. Did it take a village? No, it took a combination of strong consumer laws, a strong CFPB, tough state attorneys general working on a bi-partisan basis and, finally, consumer attorneys engaged in private enforcement of the laws as another line of defense. For markets to work fairly, consumers need all these levels of protection.</p>
<p>In addition to demonstrating the importance of layered consumer protection and enforcement mechanisms, the cases also show that it is important to regulate the bureaus and hold them accountable, because despite their arrogant disregard for meeting the accuracy and reinvestigation standards of the law, they serve as gatekeepers to financial and employment opportunity. The <strong><a href="https://www.ftc.gov/news-events/press-releases/2013/02/ftc-study-five-percent-consumers-had-errors-their-credit-reports" target="_blank">Federal Trade Commission has concluded</a></strong> that up to 1 in 4 of all credit reports contain serious mistakes and 5% of all reports contain mistakes that could lead to paying more for or credit or to a denial of credit. Keeping an eye on the credit bureaus is important.</p>
<p>Here is a summary of some recent credit bureau news:</p>
<p><strong>State Attorneys General Actions Force Bureaus To Drop Inaccurate Public Records:</strong> On July 1, thanks to the efforts of a bi-partisan, multi-state enforcement effort by 31 state Attorneys-General, 12 million consumers will see their <strong><a href="http://www.wtsp.com/money/magnify-money/12-million-people-are-about-to-get-a-credit-score-boost-heres-why/422796294" target="_blank">credit scores increase</a></strong> by up to 20 points; 700,000 of them will see increases of as much as 40 points as certain negative public records, including tax liens and court judgements, drop off their credit reports. Why? Because the bureaus (Experian, Equifax and Transunion) have often failed to adequately match the often-scant court records with the full name and Social Security Number of the consumer to meet the Fair Credit Reporting Act’s “maximum possible accuracy” standard. While industry groups have <strong><a href="http://www.chicagotribune.com/classified/realestate/ct-re-0312-kenneth-harney-20170308-column.html" target="_blank">whined</a></strong> that lenders may now receive less information than they need to make prudent decisions, they fail to acknowledge that many consumers have suffered lower credit scores due to routine inclusion of negative information about some other consumer on their reports. As another outcome of the 31-state <strong><a href="http://www.ohioattorneygeneral.gov/Media/News-Releases/May-2015/Attorney-General-DeWine-Announces-Major-National-S" target="_blank">enforcement action</a></strong> led by Ohio Attorney General Mike DeWine, as of September 1 only medical debt older than 6 months can be reported (much medical debt is wrongly blamed on the consumer, but is the result of slow-pay insurance companies or billing errors). Credit scoring companies are reducing their reliance on medical debt data points because they have finally realized that medical debt is not a good predictor of credit worthiness. Why? People have medical debt because they got sick, not because they were deadbeats on a credit card "shopping spree". Other highlights of the National Consumer Assistance Plan derived from the states’ enforcement action – from the perspective of the credit bureaus – are <a href="http://www.nationalconsumerassistanceplan.com/highlights/"><strong>here</strong>.</a> Make no mistake, although the bureaus strew words like “cooperatively” throughout that website, all the changes they are making are the result of government enforcement actions.</p>
<p><strong>Class Action Lawsuit Results in Record Penalty Against Transunion</strong>: Last week, a <strong><a href="https://consumerist.com/2017/06/21/transunion-must-pay-60m-for-mistakenly-tagging-people-as-possible-terrorists/" target="_blank">jury found the Big 3 credit bureau Transunion guilty</a></strong> of violating the Fair Credit Reporting Act and harming a class of over 8,000 consumers. The jury imposed statutory damages and additional punitive damages, due to the willful nature of the violation, totaling $60 Million. Transunion mixed the names of ordinary consumers up with those of terrorists and drug traffickers with similar names on the U.S. Treasury Department’s very-scary-to-be-on <strong><a href="https://www.treasury.gov/resource-center/sanctions/Pages/default.aspx" target="_blank">Office of Foreign Assets Control (OFAC)</a></strong> database. It allegedly failed to adequately match birthdates or Social Security Numbers. And, it had been caught doing the same thing years before. In its failed defense, Transunion claimed the consumers did not suffer financial harm, so let it go. But privacy laws protect you from reputational harms as well; your good name has real value and loss of your good name has a real cost. The authoritative <strong><a href="https://www.nclc.org/media-center/class-actions-matter-consumers-mislabeled.html" target="_blank">National Consumer Law Center</a></strong> also points out that the case points to the need to protect the use of class action remedies, which have long been under attack.</p>
<p><strong>CFPB Nails Credit Repair Doctors: </strong>The credit bureaus not only make mistakes, they fail to conduct adequate reinvestigations of disputes or remove inaccurate information. Instead of complying with these FCRA responsibilities, the bureaus have developed their own lucrative direct-to-consumer channel for selling credit monitoring and identity-theft services to concerned consumers. But, the credit bureaus are so sloppy they’ve also fomented (spawned) an entire add-on predatory industry -- last-dollar credit repair doctors -- that takes advantage of the heightened consumer interest in higher credit scores that’s been driven by the bureaus’ scare-tactic marketing of their own absurdly-priced monitoring products. This week, the <strong><a href="https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-actions-against-credit-repair-companies-charging-illegal-fees-and-misleading-consumers/" target="_blank">CFPB announced penalties</a></strong> of $2 million against 4 California-based credit repair doctors that “charged illegal fees and misled consumers about their ability to fix their credit.” These “doctors” falsely claimed they could “repair” your credit. Of course, no one can remove accurate, negative information.</p>
<p>These important actions all build on a series of other important steps led by the CFPB to rein in the credit bureaus over the last few years, as we have explained in previous blogs. The following is summarized from a more detailed recent (March 2017) blog "<a href="http://www.uspirg.org/blogs/eds-blog/usp/if-cfpb-weakened-won%E2%80%99t-credit-bureaus-run-amok-again" target="_blank">If The CFPB Is Weakened, Won’t The Credit Bureaus Run Amok (Again?)</a>".</p>
<ul><li>The CFPB has, virtually from its standup in 2011, taken a very close look at the so-called Big Three credit bureaus — Experian, Trans Union and Equifax, because they serve as unappointed gatekeepers to financial and employment opportunity and because the credit reporting marketplace is a “dead-end market.”</li>
<li>As CFPB Director Richard Cordray often explains, the credit bureaus (and debt collectors, too) are dead-end markets worthy of greater scrutiny and oversight. Remember, you can choose your bank and you can vote with your feet if you don’t like it. You’re stuck, however, with the dead-end credit bureaus. Unfortunately, their mistakes matter to your financial and employment opportunity. Here’s an <strong><a href="https://www.consumerfinance.gov/about-us/newsroom/prepared-remarks-of-cfpb-director-richard-cordray-at-university-of-michigan-law-school/" target="_blank">excellent speech</a></strong>, where the director first explains the run-up to and need for the CFPB as well as its focus on what he calls the “four Ds”: Debt Traps, Discrimination, Deception, and Dead-End markets. </li>
<li>The CFPB’s very first action to create a “larger participant rule” in 2012 gave it <strong><a href="http://www.uspirg.org/blogs/eds-blog/usp/cfpb-issues-rule-regulating-big-credit-bureaus" target="_blank">authority to supervise, or examine, the larger bureaus</a></strong>. That's a powerful surveillance tool that the FTC was never given, although it has tried since 1971 to rein in the credit bureaus.</li>
<li>In 2012, the CFPB issued a major report on the “<strong><a href="https://www.consumerfinance.gov/data-research/research-reports/key-dimensions-and-processes-in-the-u-s-credit-reporting-system/" target="_blank">dimensions</a></strong>” of the consumer reporting system. A finding (see footnote 104) of that report, as a <a href="https://www.ftc.gov/news-events/media-resources/consumer-finance/credit-reporting" target="_blank"><strong>senior credit bureau lobbyist</strong></a> was forced to admit at a subsequent <strong><a href="http://www.commerce.senate.gov/public/index.cfm?p=Hearings&amp;ContentRecord_id=789d0376-7d81-49fe-b490-0c8663e7c807&amp;ContentType_id=14f995b9-dfa5-407a-9d35-56cc7152a7ed&amp;Group_id=b06c39af-e033-4cba-9221-de668ca1978a" target="_blank">2013 Senate hearing</a></strong>, was instrumental in forcing the Big 3 to finally include information submitted by the consumer in their re-investigations.</li>
<li>The CFPB’s Monthly Complaint Database “<strong><a href="https://www.consumerfinance.gov/about-us/newsroom/cfpb-monthly-snapshot-spotlights-credit-reporting-complaints/">snapshots</a></strong>” regularly list the credit bureaus as 1, 2 and 3 on the complaint parade. </li>
<li>Earlier this year, the CFPB issued a special edition of its “<strong><a href="https://www.consumerfinance.gov/data-research/research-reports/supervisory-highlights-consumer-reporting-special-edition/" target="_blank">supervisory highlights</a></strong>” outlining all the problems examiners have identified with credit bureaus. The report is only possible because the CFPB has examination authority that Congress never gave the FTC. The report lists a platform of CFPB-demanded changes to the credit bureaus’ “sub-par” procedures to both clean up their reporting systems and force them to improve their complaint-handling.</li>
</ul><blockquote><p>Chi Chi Wu of the National Consumer Law Center <strong><a href="https://library.nclc.org/new-cfpb-report-details-problems-and-recent-reforms-consumer-reporting-companies-0" target="_blank">released an analysis</a></strong> of the findings of that CFPB report: “The report confirms the long-standing and extensive criticisms that attorneys and advocates have had of the Big Three CRCs [Consumer Reporting Companies] over the decades. As CFPB Director Richard Cordray <strong><a href="https://www.consumerfinance.gov/about-us/newsroom/prepared-remarks-cfpb-director-richard-cordray-consumer-advisory-board-meeting-march-2017/" target="_blank">characterized it</a></strong>, "Standards on the accuracy of information in consumer credit files were distinctly sub-par."</p></blockquote>
<p>Credit reporting is a unique example of a financial sector where special interests have been unable to completely preempt state authority or hamstring private consumer enforcement or disarm the federal cop, although they are certainly trying. For now, that means we have an environment where consumer attorneys, state and federal enforcers and strong federal laws all work together to make an otherwise dead-end market work.</p>
<p>Do consumers really deserve a world where they have no recourse when gatekeepers mix them up with terrorists? Where gatekeepers can make, then ignore, mistakes that lower their chances of getting credit or a job? Where bottom-feeder credit repair doctors can seek to take their last dollar because that gatekeeper didn’t do its job? Of course not.</p>
<p>The idea of the CFPB needs no defense, only more defenders. So do the concepts of protecting strong consumer laws, strong state enforcement and, finally, the rights of consumers and their consumer attorneys to take on corporate wrongdoers either individually or banded together in class actions, without unfair restrictions that tilt the playing field in favor of the wrongdoer.</p>
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<ul class="field field-name-field-term-topics field-type-taxonomy-term-reference field-label-hidden">
<li class="field-item">
<a href="/topics/financial-reform" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Financial Reform</a> </li>
</ul>
Wed, 28 Jun 2017 17:57:44 +0000edm56516 at http://georgiapirg.orghttp://georgiapirg.org/blogs/eds-blog/usp/sloppy-credit-bureaus-sketchy-credit-doctors-slammed-trifecta-cfpb-state-ags-and#commentsStatement Commending New Military Consumer Enforcement Acthttp://georgiapirg.org/news/usp/statement-commending-new-military-consumer-enforcement-act
<div class="field field-name-field-newsrelease-status field-type-text field-label-hidden">
For Immediate Release
</div>
<div class="field field-name-field-shared-post-date field-type-datetime field-label-hidden">
<span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2017-06-21T00:00:00-04:00">Wednesday, June 21, 2017</span>
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<div class="field field-name-body field-type-text-with-summary field-label-hidden">
<p dir="ltr"><em><strong>“These senators have the right idea-- strengthen the CFPB’s ability to protect those who serve. Why do others want to weaken the CFPB?”</strong></em></p>
<p dir="ltr"><strong>Statement by Mike Litt, U.S. PIRG Consumer Advocate On How the Military Consumer Enforcement Act further empowers the Consumer Financial Protection Bureau (CFPB) to protect servicemembers and veterans</strong></p>
<p dir="ltr"> Washington, DC – “Today, U.S. PIRG applauds U.S. Senators Jack Reed (RI), Sherrod Brown (OH) and other Senators (list below) for introducing the Military Consumer Enforcement Act. The bill enhances the CFPB’s ability to protect servicemembers and veterans from abuses in the financial marketplace by giving it jurisdiction over enforcing key parts of the Servicemembers Civil Relief Act (SCRA).</p>
<p dir="ltr">The CFPB and its Office of Servicemember Affairs have already demonstrated a strong commitment to protecting those who serve. For example, it has taken at least 12 major legal actions against financial firms targeting young servicemembers, older veterans and their families, securing approximately $130 million in relief for them. It has also successfully investigated banks to ensure compliance with the Military Lending Act.</p>
<p dir="ltr">And it has handled over 72,000 complaints from the military community. A U.S. PIRG Education Fund <a href="http://uspirg.org/reports/usp/protecting-those-who-serve">report</a> released earlier this month found that debt collection abuses were the leading source (32%) of servicemember complaints to the CFPB. <a href="http://uspirg.org/resources/usp/fact-sheet-protecting-those-who-serve">(2-page report summary)</a>.</p>
<p dir="ltr">But the SCRA offers important additional protections that have been, at best, unevenly enforced by other regulators. The SCRA includes provisions that prohibit the eviction of military members and their dependents from rental or mortgaged property, and the law caps interest at 6% on debts incurred prior to an individual entering active duty military service.</p>
<p dir="ltr">Given its proven track record for protecting our military community, giving the CFPB the jurisdiction over key parts of the SCRA means that the law will actually be enforced. These Senators have the right idea - we should be strengthening the CFPB’s ability to protect those who serve. Why do others want to weaken the watchdog?</p>
<p dir="ltr">While we commend the Senators for this effort, we also warn the entire Senate that it must reject threats to the CFPB. Threats include the House-passed Financial Choice Act, HR 10, and proposals from other Senators to weaken the CFPB. The better-named Wrong Choice Act would leave the CFPB an unrecognizable husk and also roll back most of the Dodd-Frank Act’s other protections against another collapse of our financial system and economy.</p>
<p dir="ltr">Dismantling the CFPB would place servicemembers, veterans and their families in “financial harm’s way,” thereby threatening unit preparedness since financial problems are a leading cause of revocation of security clearances. </p>
<p dir="ltr">Our troops, their families and our veterans and all the rest of us deserve a strong watchdog protecting their interests. That watchdog is the CFPB.”</p>
<p dir="ltr">-30-</p>
<p dir="ltr">Other original co-sponsors of the Military Consumer Enforcement Act include Sens. Jon Tester (Mont.), Richard Blumenthal (Conn.), Tim Kaine (Va.), Tammy Duckworth (Ill.), Elizabeth Warren (Mass.), Tammy Baldwin (Wis.), Al Franken (Minn.), Amy Klobuchar (Minn.), Chris Van Hollen (Md.) and Catherine Cortez-Masto (Nev.).</p>
<p>U.S. PIRG is the federation of state Public Interest Research Groups. PIRGs are non-profit, non-partisan public interest advocacy organizations that stand up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society. On the web at<a href="http://www.uspirg.org/"> www.uspirg.org</a>.</p>
</div>
<div class="field field-name-field-term-topics field-type-taxonomy-term-reference field-label-hidden">
<a href="/topics/financial-reform" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Financial Reform</a>
</div>
<div class="field field-name-field-shared-subtitle field-type-text field-label-hidden">
Gives CFPB More Tools To Protect Those Who Serve
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<div class="field field-name-field-shared-organization field-type-text field-label-hidden">
U.S. PIRG
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<div class="field field-name-field-shared-summary field-type-text-long field-label-hidden">
<p>Read our statement commending the introduction of the Military Consumer Enforcement Act by Sens. Jack Reed (RI), Sherrod Brown (OH) and others. These senators have the right idea-- strengthen the CFPB’s ability to protect servicemembers, veterans and their families. Why do others want to weaken the CFPB?</p>
</div>
Wed, 21 Jun 2017 17:02:02 +0000edm56461 at http://georgiapirg.orghttp://georgiapirg.org/news/usp/statement-commending-new-military-consumer-enforcement-act#commentsPHH v. CFPB: The Latest Attack on the Consumer Bureauhttp://georgiapirg.org/blogs/blog/usp/phh-v-cfpb-latest-attack-consumer-bureau-0
<div class="field field-name-field-shared-post-date field-type-datetime field-label-hidden"><div class="field-items"><div class="field-item even"><span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2017-05-23T00:00:00-04:00">Tuesday, May 23, 2017</span></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden">
<p>On Wednesday, May 24, the full D.C. Circuit of the U.S. Court of Appeals will hear oral argument in <em>PHH v. CFPB</em>—a case that could have a significant impact on the work of the most effective consumer protection agency that we have.</p>
<p>If you want to know more about the issues involved in the case, check out this <strong><a href="https://www.youtube.com/watch?v=HtOg9xL9Cho" target="_blank">short video</a>.</strong></p>
<p>The bottom line is simple. The CFPB stands up for consumers by going after the wrongdoers who threaten our financial security. But that’s exactly why the agency is under attack from special interests. U.S. PIRG—along with our many coalition partners and state attorneys general from around the country—strongly supports keeping the CFPB in its concurrent form so that it can go to bat for consumers, including potentially vulnerable consumers like members of the military and college students. As we argue in our <strong><a href="http://www.uspirg.org/sites/pirg/files/resources/AFR%20et%20al%20amicus%20as%20filed.pdf">friend-of-the-court brief</a></strong>, the D.C. Circuit should reject this latest attack and let the CFPB keep doing its job.</p>
</div>
<ul class="field field-name-field-term-topics field-type-taxonomy-term-reference field-label-hidden">
<li class="field-item">
<a href="/topics/financial-reform" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Financial Reform</a> </li>
</ul>
Tue, 23 May 2017 13:12:18 +0000edm55671 at http://georgiapirg.orghttp://georgiapirg.org/blogs/blog/usp/phh-v-cfpb-latest-attack-consumer-bureau-0#commentsStatement on House Financial Services Committee Passage of HR 10, the Wrong Choice Acthttp://georgiapirg.org/news/usp/statement-house-financial-services-committee-passage-hr-10-wrong-choice-act
<div class="field field-name-field-newsrelease-status field-type-text field-label-hidden">
For Immediate Release
</div>
<div class="field field-name-field-shared-post-date field-type-datetime field-label-hidden">
<span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2017-05-04T00:00:00-04:00">Thursday, May 4, 2017</span>
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<div class="field field-name-field-author-bio field-type-node-reference field-label-hidden"><div class="field-items"><div class="field-item even"><a href="/staff/xxp/ed-mierzwinski">Ed Mierzwinski</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden">
<p><em>Today, the House Financial Services Committee approved HR 10, the so-called Financial Choice Act, on a straight party-line vote. We call it the <a href="http://www.uspirg.org/news/usp/financial-“choice”-act-“cruel-choice”-cfpb-consumers-students" target="_blank">Wrong Choice Act</a>. Our detailed opposition <a href="http://uspirg.org/resources/usp/letter-congress-opposing-financial-choice-act-20" target="_blank">letter</a> to the committee is here. </em></p>
<p><em>The following statement can be attributed to U.S. PIRG Consumer Program Director Ed Mierzwinski</em></p>
<p> "The so-called Financial Choice Act is actually the Wrong Choice for America's consumers, homeowners, depositors, small investors, taxpayers and our economy itself. It leaves the successful <a href="http://consumerfinance.gov" target="_blank">CFPB</a> as an unrecognizable husk incapable of policing the marketplace while piling innumerable gifts on to the majority's Wall Street and payday lender patrons who will again run amok if the bill becomes law. They ignore the fact of the 2008 financial collapse at our collective peril."</p>
<p> -30-</p>
<p><em>U.S. PIRG serves as the non-profit, non-partisan federation of state Public Interest Research Groups. PIRGs stand up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society. On the web at uspirg.org.</em></p>
</div>
<div class="field field-name-field-term-topics field-type-taxonomy-term-reference field-label-hidden">
<a href="/topics/financial-reform" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Financial Reform</a>
</div>
<div class="field field-name-field-shared-organization field-type-text field-label-hidden">
U.S. PIRG
</div>
<div class="field field-name-field-shared-summary field-type-text-long field-label-hidden">
<p>Today, the House Financial Services Committee approved HR 10, the so-called Financial Choice Act, on a straight party-line vote. We call it the Wrong Choice Act. The bill eviscerates the successful CFPB, which has returned $11.8 Billion to over 29 million consumers in less than six years. The bill repeals much of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act enacted to protect us after the 2008 financial collapse. Our statement is below.</p>
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Thu, 04 May 2017 19:17:35 +0000edm55306 at http://georgiapirg.orghttp://georgiapirg.org/news/usp/statement-house-financial-services-committee-passage-hr-10-wrong-choice-act#comments